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February 13, 2012

Greece Adopts Austerity Plan

Protesters opposed to measures battle in the streets during vote

As protesters squared off against police and buildings burned in Athens, and unrest flared across the rest of the country, the Greek parliament approved stricter austerity measures insisted on by the troika of the European Union, International Monetary Fund and European Central Bank to win approval for a second bailout package of 130 billion euros ($172 billion).

Strong public opposition to the additional 325 billion euros in budget cuts, from pay, pensions and jobs, resulted in burning buildings and clashes with police in Athens. Bloomberg reported that Greek officials approved the measures early Monday, after hours of debate.

The deeply unpopular cuts, coming on top of austerity measures already imposed by the troika, promise more hard times for Greeks already struggling to do more with less and amount to approximately 7% of GDP over three years.

Now the measures head to the troika, in the hope that the lenders will approve the bailout package. Even though the austerity program was proposed by the three bodies, there is the possibility that it will still fail to satisfy those in charge; on Friday German Finance Minister Wolfgang Schaeuble told German lawmakers that Greece appeared to be on a course to miss its deficit goals, suggesting that the measures may fall short.

According to German Economy Minister Philipp Roessler, before a majority in Parliament will approve the bailout, Germany wants to see that Greece is actually implementing reforms and will wait till it reviews a report compiled by the troika before it votes. Roessler was quoted saying that the latest Greek vote “was a necessary condition but implementation of these measures is what counts. We’re waiting for the troika report on what progress Greece has made.”

Other nations in the EU, including Finland and the Netherlands, have not yet scheduled votes on the matter.